November 2018 Edition | Volume 72, Issue 11
Published since 1946
Excise Tax Update - Final FY2018 Collection Data
Past Excise Tax Updates have provided background information relating the excise tax program to the North American Model for Wildlife Conservation – the funding provided through the wildlife and sport fish excise tax programs represents the funding foundation for that Model. The ability of the state fish and wildlife agencies to maintain healthy fish and wildlife populations is directly linked to the health of the hunting, recreational shooting, fishing and boating industries. For the funding system to continue to support the great work of the state fish and wildlife agencies, we must have hunters, anglers, recreational shooters and boaters who are buying hunting and fishing licenses and buying new equipment. If that happens, the industries will continue to pay excise taxes, there will continue to be places for us to hunt, fish, launch our boats and enjoy recreational shooting. If that doesn’t happen, the reliable funding source that is supporting the North American Model will begin to fade.
The Update
As a part of the Wildlife Management Institute’s ongoing Multi-State Conservation Grant supporting the improvement of relationships between the state fish and wildlife agencies and the industries who contribute to the excise tax program, we are keeping a very close eye on excise tax collections that make up the biggest part of the American System of Conservation Funding.
The numbers for the Federal Fiscal Year 2018 (October 1, 2017 thru September 30, 2018) are in and the trends and comparisons to last year that we have been seeing since the first quarter of the fiscal year are confirmed. While the Sport Fish Restoration account survived some end of year adjustments in fishing equipment and tackle boxes and held on to a very modest 3% increase over the FY 2017 collections, the Wildlife Restoration account saw double digit percentage reductions in firearms, pistols and ammunition. When the dust settled, collections in the Wildlife Restoration account was down 17% from the FY 2017 collections. This number is bad, but there was a bit of a rally late in the year and a 17% loss is better than the 30% loss the data was showing six months ago.
Here’s a look at the revenues as provided by the U.S. Fish and Wildlife Service based on reporting by the two collection agencies, the Internal Revenue Service and the Tax and Trade Bureau.
The Sport Fish Restoration Account
The Trends:
Here are the comparisons of the collections for FY 2017 and FY 2018.
| Trends Between Last and Current Fiscal Years | |||
| Product | FY 2017 | FY 2018 | % Change |
| Motorboat Fuel Tax | $308,745,000 | $312,747,000 | 1% |
| Small Engine Fuel Tax | $121,999,000 | $123,007,000 | 1% |
| Interest | $13,407,286 | $24,175,214 | 80% |
| Customs Duties | $59,045,441 | $63,575,908 | 8% |
| Fishing Equipment | $105,401,762 | $93,269,516 | -12% |
| Electronic Boat Motors | $4,051,357 | $5,924,053 | 46% |
| Fishing Tackle Boxes | $2,103,211 | $1,693,480 | -19% |
| Fishing Rods and Poles | $17,168,073 | $24,965,721 | 45% |
| Total Sportfish & Boating Restoration | $631,921,130 | $649,357,892 | 3% |
The Funding Sources:
It is important to understand where these numbers come from, how they relate to past numbers and how the individual funding sources relate to the overall funding available. The following pie-chart provides a strong reference to how important the motorboat and small engine fuel taxes are to the support of state agency’s aquatic conservation efforts.
Wildlife Restoration Account
The Trends:
Here are the comparisons of the collections for FY 2017 and FY 2018.
| Trends Between Last and Current Fiscal Years | |||
| Product | FY 2017 | FY 2018 | % Change |
| Pistols & Revolvers | $254,600,033 | $201,966,531 | -21% |
| Firearms | $246,806,690 | $205,227,233 | -17% |
| Shells & Cartridges | $254,782,706 | $217,575,786 | -15% |
| Archery Equipment | $39,776,192 | $38,308,066 | -4% |
| Arrow Shafts | $9,994,741 | $9,756,882 | -2% |
| Total Wildlife Restoration | $805,960,361 | $672,834,498 | -17% |
The Funding Sources:
An important piece of information that we must not overlook in this collection data is the source of the funds. Roughly speaking, less than 10% of the collections are coming from archery and around 30% each is coming from pistols, firearms and ammunition. Here is a pie chart that shows this a bit more dramatically:
Summary:
No matter how you look at it, state fish and wildlife agencies are going to have less money in the coming year to do the great work they do – especially on the wildlife side. The industry has been predicting that this reduction is coming for at least a year now. Those that consider trend data and consider the information provided by the latest National Survey results and the age demographic information showing up in our license sales data have been predicting these reductions for even longer. Now these predictions are showing up in our funding; the basic underpinning of the North American Model (its funding foundation) is in trouble.
The importance of focused efforts on hunter and angler recruitment, retention and reactivation cannot be overstated. While the natural tendency during times of constraining budgets might be to pull back and focus only on the basics like on-the-ground fish and wildlife management activities, we must not lose sight of the importance of growing our customer base and of ensuring the business health of our industry partners. Every new hunter, angler, boater and recreational shooter we recruit will provide license revenues, but more importantly, those new recruits will buy equipment that will generate excise taxes that will ensure that our state wildlife agencies can take care of those important on-the-ground fish and wildlife management activities.
This current funding challenge is a call to action for the state fish and wildlife agencies and the fishing and hunting industries to come together to develop and implement strong marketing and recruitment strategies. Thanks to the great work of the Council to Advance Hunting and the Shooting Sports and the Recreational Boating and Fishing Foundation, we have the Recruitment, Retention and Reactivation (R3) Program. Hopefully, state fish and wildlife agencies will continue their strong support of this program in the face of these declining budget numbers. Most industry CEOs will tell you that in the face of declining sales, you need to double down on your marketing and outreach efforts. I hope the state fish and wildlife agencies will see these declining budget numbers as a call to double down on their commitment to the R3 Program.